Summary
Royal Caribbean Cruises Ltd. (RCL) filed an 8-K on June 18, 2015, to report a material amendment to its existing $1.1 billion unsecured revolving credit facility. The primary update is the extension of the facility's termination date to June 2020, providing the company with extended financial flexibility and stability. The amended terms maintain the existing interest rate structure (LIBOR plus a 1.5% margin) and a 0.25% facility fee. Furthermore, the amended facility allows RCL the option to increase its borrowing capacity by up to an additional $300 million, subject to lender commitments. The agreement retains substantially similar covenants, including requirements for minimum net worth, a fixed charge coverage ratio, and limitations on the net debt-to-capital ratio, which are crucial for maintaining financial health. This extension and potential increase in credit availability are positive developments for investors, indicating continued confidence in RCL's financial standing and operational capacity.
Key Highlights
- 1RCL amended and restated its $1.1 billion unsecured revolving credit facility.
- 2The termination date of the credit facility has been extended to June 2020.
- 3The facility allows for a potential increase in capacity of up to an additional $300 million.
- 4Advances under the facility continue to bear interest at LIBOR plus a 1.5% margin.
- 5A facility fee of 0.25% per annum on total commitments remains in place.
- 6Key financial covenants, including minimum net worth and fixed charge coverage ratio, are maintained.
- 7The amendment reflects continued access to and favorable terms for RCL's financing.